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2009 (10) TMI 873 - HC - VAT and Sales TaxWhether the Tribunal was justified in declining the concessional rate claimed by the petitioner at four per cent for the work executed for KSE Board under notification S.R.O. No. 1091/99? Held that - What is clear from the provision contained in the contract is that the parties have agreed that the work executed is a works contract mentioned in the KGST Act and the contract is loaded with tax component in full and it is for the contractor to pay the actual tax for the works contract. In other words, the purchaser for whose benefit concessional rate is provided under notification has not claimed the concessional rate. The beneficiary has not claimed because the contract does not provide payment of tax at concessional rate which means that full rate of tax is loaded in contract amount. We therefore hold that the petitioner s claim is neither bona fide nor tenable. Consequently, we uphold the order of the Tribunal confirming the assessment and dismiss the S.T. Revision cases.
Issues Involved:
Interpretation of notification for concessional tax rate on works contract executed for KSE Board. Detailed Analysis: The primary issue in this case involved the interpretation of a notification regarding the concessional tax rate claimed by the petitioner for works executed for the Kerala State Electricity Board (KSEB) under notification S.R.O. No. 1091/99. The petitioner contended that the notification applied not only to the sale of goods to KSEB but also to the sale of goods in the course of executing works contracts. The petitioner offered to remit tax at a compounded rate under section 7(7A) of the KGST Act, while the assessing officer assessed the turnover work at 8.4%, turning down the petitioner's claim for a concessional tax rate at four per cent based on the notification. The court analyzed the scope of work awarded by KSEB to the petitioner, which included setting up substations, installation of transmission and distribution lines, and other related works. The contract specified that the work was to be completed on a turnkey basis in accordance with the provided specifications and conditions. The court noted that the notification for the concessional tax rate at four per cent applied to the sale of goods to specific entities for use in power generation and distribution, and the question was whether this applied to goods involved in the execution of works contracts. The court examined the contractual terms between the petitioner and KSEB, which indicated that the KSEB did not seek a concessional tax rate and had not issued the necessary declarations for such a rate. The court highlighted that the contract explicitly stated that the contractor was responsible for paying the full tax component for the works contract. The court emphasized that the beneficiary, in this case, the KSEB, had not claimed the concessional rate, indicating that the full tax rate was included in the contract amount. Therefore, the court held that the petitioner's claim for a concessional rate was not valid, upholding the Tribunal's order confirming the assessment and dismissing the revision cases. In conclusion, the court's judgment focused on the interpretation of the notification for concessional tax rates on works contracts executed for the KSE Board. The court analyzed the contractual terms, the scope of work, and the lack of declarations from the KSEB to support the petitioner's claim for a concessional tax rate. Ultimately, the court found that the petitioner's claim was not bona fide or tenable, leading to the dismissal of the revision cases.
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